One of the major barriers to user uptake of on-line shopping is the lack of or at least perceived lack of security in relation to the provision of payment details, such as credit card numbers, to merchant sites. There is such a reluctance to provide credit card or debit card details to merchants that surveys carried out in relation to on-line shopping have determined that anywhere between 25% and 75% of customers abandon their “shopping carts” without completing purchase.
There are other reasons for non-completion of purchase apart from customers not trusting merchant sites with their credit card details. These include the fact that not all on-line consumers have credit cards, and, for those with credit cards, credit limits may have been reached.
Customer initiated direct debit is known for on-line payment of bills, such as utility bills, and for recurring payments, but the sites need prior standing authority from the user, usually organized through off-line mechanisms. Without this explicit authority no third parties, such as merchants, are able to access funds from the customer. Such an arrangement is tedious and inconvenient to set up. In any event, customers are extremely reluctant to give authority to a third party to access their funds and there are concerns about fraud and difficulty in cancelling such an authority.
Presently, there is no mechanism for enabling direct payment from a customer's usual account, such as a bank account, to a merchant's account, during an on-line product transaction initiated from a merchant's site.
These difficulties give rise to a low rate of uptake of on-line merchandising.